This book by Eugen von Boehm-Bawerk is a supplement to his two great books, Capital and Interest and The Positive Theory of Capital. Here he takes on alternatives to the Austrian theory he had previously presented, and thereby clarifies the case. It is an excellent illustration of the economist's stunning patience and capacity for thorough exposition.
It begins with an introduction by the historian of thought William A. Scott, who praises these essays to the skies. Boehm-Bawerk then takes on a number of new competitors to the Austrian theory: The agio theory, use theories, the abstinence theory, the labor theory, the productivity theory, the exploitation theory, and the eclectics.
It's incredible, by the way, how each of these theories continues to be ""discovered"" by economists in our own time, who, being unaware of the history of thought, are under the impression that they are advancing science when in fact they are only digging up old fallacies.
In each case, he shows the fallacies and missteps of all alternatives to the time-preference theory, leaving no doubt as to the origin and nature of interest.
In our own time, these rare essays constitute what is really a lost book in the history of the Austrian tradition. It is indispensible for understand both the theory and the mind of the economist who was the teacher of Mises and the master of the theory of interest.
Bohm-Bawerk's review of the literature of interest produced during the fifteen years preceding 1900, is presented herewith in translation, and needs no description or commendation. It speaks for itself. It is the hope and the belief of the translators that the English-speaking world will accord to this little book the same welcome they gave to the translation of the first edition.
WILLIAM A. SCOTT.
UNIVERSITY OF WISCONSIN,
Eugen von Böhm-Bawerk
Eugen von Böhm-Bawerk (February 12, 1851 – August 27, 1914) was in the right place at the right time to contribute importantly to the development of Austrian economics.
Böhm-Bawerk together with Carl Menger and Friedrich von Wieser were the three pillars that established the Austrian school.
Böhm-Bawerk's contributions laid the foundation for the theory of capital, and in later development by others such as Knut Wicksell, the modern understanding of interest in terms of compensation for the use of capital. He emphasized the role of time in determining the value of goods, and developed marginal utility theory into a theory of prices. His work addressed significant economic questions such as how to increase capital, and what is the justification for charging interest. Böhm-Bawerk was the first economist to refute Karl Marx's claim that capitalists exploit workers. He argued that in fact they provide a service to workers by paying them in advance of payment the owners receive for sale of the goods produced by workers. Böhm-Bawerk's view of economic processes included the actual situation and expectations of people involved, not just material measures of quantity of goods and hours of labor. In this way, his answers came closer to addressing the real situation of human society and how we can cooperate together to the benefit of all.